4. (10 points) Let's look at the inverse demand for Lakers games against 3 different opponents

(Clippers, Mavericks and Pistons)

Clippers: P = 210-3Q

Mavericks: P = 140-3.5Q

Pistons: P = 60-5Q

(The Staples Center can hold up to 20,000 fans and the MC is equal to 0 up until the point of full

capacity.)

Using this information,

a) Calculate how much the Lakers can charge for their games by using variable ticket price

technique. What is their Total Revenue?

b) Imagine the NBA passes a rule in which teams cannot charge different prices for their

games. Calculate the average ticket price for these 3 games and show how much revenue

the

Lakers

would

lose./nc) Is there any pricing technique the Lakers could apply that would boost the attendance

against the less desirable teams such as the Pistons? Which one would be a good choice

and how should it be applied?

d) Now Suppose the Lakers will play those 3 teams on the last 3 games of the season. If they

win all 3 games, they are in the playoffs. Thus, the Lakers will attempt to sell out Staples

Center every game. What should be the price charged by the Lakers in each game? How

much revenue are they giving up (how much revenue are they losing compared to VTP) in

order to make it to the playoffs? And why can this strategy end up being more profitable

if they manage to get into the playoffs?